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Confirming Shareholder Value In the San Diego Water Department

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The City of San Diego Water Department has a multi-year Capital Improvement Program that was developed after many years of minimal investment in their infrastructure.

The Department has been pursuing a multi-year Capital Improvement Program (CIP) that will provide much needed improvements to the city s water system. A second series of annual rate increases are planned primarily to provide funding for the CIP that is currently in excess of 100 million per year. During the annual budget process, the Water Department presented the City Council its annual budget proposal that included planned rate increases for the next three years.

A management review was commissioned and Black & Veatch was selected to complete the review, entitled Confirming Shareholder Value, of the San Diego Water Department. The key objective of the management review was to confirm to the citizens of San Diego and its elected officials that the Water Department is operating in an effective and efficient manner building value to its shareholders.

The department has been in the process of many organizational changes over several years with numerous successes in the operation and management of the organization. Changes in upper management of the department, issues raised at the City Council level, and a few significant public relations issues stimulated the need for the management review.

After being selected, Black & Veatch immediately began the management review process with particular focus on several specific areas as directed by the city. The particular areas of focus were:

Organizational Structure and Management

CIP Project Management

Customer Service

Maintenance and Operations


Billing Frequency (The results will be presented in a separate report)

These areas were chosen in order to focus on specific concerns that had been expressed about certain areas of the Department and to complete a high level review of the overall organizational ability to meet its goals. In addition, the review would insure the continued confidence of the citizens (shareholders) in the operation of the utility.

A very aggressive schedule was established for completion of the review of the Water Department. A draft report was to be delivered to the City approximately eight (8) weeks after Notice to Proceed was issued.

In order to meet this aggressive schedule, Black & Veatch formed six teams to pursue each area of the management review so that the project would be completed in the tight timeframe that was allowed. The teams consisted of very experienced staff from Black & Veatch and from the sub-consultants on the project, Charles E. Day & Associates and Vanir Construction Management
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Document Type: Research Article

Publication date: 2002-01-01

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